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A Meta-study of the General Insurance Reserving Issues Taskforce and Reserving Oversight Committee Research in this area between 2004 and 2009

  • E. R. Gibson, C. Barlow, N. A. Bruce, K. M. Felisky, S. Fisher, N. G. J. Hilary, I. M. Hilder, H. Kam, P. N. Matthews and R. Winter...

Abstract

The General Insurance Board of the Faculty and Institute of Actuaries responded to some of the criticisms raised in the Morris review of the Actuarial Profession and in the press by rating agencies and others, regarding the Actuarial Profession's approach to actuarial reserving in general insurance by setting up a taskforce known as the General Insurance Reserving Issues Taskforce (GRIT). The taskforce worked from 2004 to 2006 and produced a significant report, including some new professional content and recommendations for further areas of development and research. Since then, through the GRIT successor body: the Reserving Oversight Committee (ROC), many working parties have formed and many General Insurance Research Organisation (GIRO) presentations and papers have been forthcoming. One area that has been a recurring theme through the last five years is how the Profession models and communicates the uncertainty in the claims reserving process. In the context of recent events in global financial markets, the forthcoming new regulatory framework of Solvency II, and the developments in other professions globally through IFRS and other drivers, it is timely that actuaries take stock of the many changes in our practices over the last five years and consider the direction actuaries should take for the challenges that lie ahead. This paper is a meta-study of the output of GRIT and ROC on reserving and uncertainty, with the intention of meeting these objectives.

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Corresponding author

Contact address Elisabeth Gibson, Ph.D., F.I.A., c/o Peter Stirling, The Institute and Faculty of Actuaries, Staple Inn Hall, High Holborn, London, WC1V 7QJ. Tel: +(44) 020 76322 177. E-mail: peter.stirling@actuaries.org.uk

References

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Archer-Lock, P., Shah, S., Fisher, S., Hilder, I., Line, N., Wenzel, K., White, M. (2003). The Cycle Survival Kit: An investigation into the reserving cycle and other issues available at http://www.actuaries.org.uk/research-and-resources/documents/cycle-survival-kit-investigation-reserving-cycle-and-other-issues
Barlow, C., Copeman, P.J., Gibson, E.R., Hilary, N., Hilder, I., Jones, A.R., Winter, R. (2007). Quantification and reporting of uncertainty for GI reserving – a paper produced by the Actuarial Profession Reserving Oversight Committee available at: http://www.actuaries.org.uk/research-and-resources/documents/quantification-and-reporting-uncertainty-general-insurance-reservin
Board for Actuarial Standards (2006). GN12 : General Insurance Business: Actuarial Reports available at: http://www.frc.org.uk/documents/pagemanager/bas/Guidance_Notes/GN12%20v5.0.pdf
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Hilder, I., Rivers, T., Rothwell, M., Sheaf, S., Toller, J (2007). The Implications of the Underwriting and Reserving Cycles for Reserving. Presented to the Actuarial Profession General Insurance (GIRO) Convention 2007. Available at: http://www.actuaries.org.uk/research-and-resources/documents/reserving-oversight-committee-implications-underwriting-and-reservi
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Jones, A.R., Copeman, P.J., Gibson, E.R., Line, N.J.S., Lowe, J.A., Martin, P., Matthews, P.N., Powell, D.S. (2006). A Change Agenda for Reserving. Report of the General Insurance Reserving Issues Taskforce (GRIT). British Actuarial Journal, 12(3), 435619.
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Standard & Poor's (2003). Insurance actuaries – a crisis of credibility.

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